Next Cuts Sales Outlook, Sees Hardest Year Since 2008

LONDON, United Kingdom — UK clothing retailer Next Plc lowered its full-year sales forecast, saying it may face the toughest year since 2008.

Sales of goods at full price will be in a range of down 1 percent to up 4 percent, Leicester, England-based Next said in a statement Thursday. That compared with a Jan. 5 forecast for growth of 1 percent to 6 percent.

“The outlook for consumer spending does not look as benign as it was at this time last year,” Chief Executive Officer Simon Wolfson said in the statement. “Although employment rates are at record highs, growth in real earnings slowed markedly from September last year. In addition, growth in output across services, manufacturing and construction all decelerated throughout the course of the year.”

Next, whose earnings have beaten analysts’ estimates each year for more than a decade, is facing increasing competition in its long-established Directory e-commerce business. Britons’ growing tendency to spend spare cash on their homes rather than clothing is adding to pressure on apparel retailers.

Underlying pretax profit rose 5 percent to 821.3 million pounds ($1.2 billion) in the 12 months through January, the company said Thursday. Analysts surveyed by Bloomberg expected 818.4 million pounds.

Full-year sales under the Next brand advanced 3.7 percent, with store revenue up 1.1 percent and sales at its home-shopping unit growing 7.7 percent.

By Thomas Buckley; editors: Matthew Boyle, Paul Jarvis and Thomas Mulier.